I see nothing wrong with providing story arcs for a single player game, but I don't really see it is something that should be aimed for with an MMORPG. Story is great, but it can do more than take more time to develop the stories, it can actually take away from your game itself. Players should be able to make their own stories so they do not have to live in a generic repetitive homogenized world.

For MMORPGs one should aim for a more personalized experience where not everyone completes the same "story" over and over. If they do, that means the world doesn't change. A stagnant world is not a long lived world.

I think the important thing for any morality system is that you have choices that have direct consequences related to the world, not related to your character.

You kill someone innocent, and now there is a warrant for your arrest making the game more difficult; maybe it was worth it because that person had a lot of money or pissed you off, maybe nobody saw and you got away with it.

You save someone's life, and they might help you later; maybe they save your life down the road, or maybe you find out they actually make your life far more difficult (IE the person you saved was actually/turns into the antagonist like DieHard/insert zombie movie respectively, or maybe the person you saved ends up having some sickness that wipes out an entire city).

The point being that if you make choice a major part of your game, the choices need consequences that make for interesting moral situations not a bigger/smaller number that makes you moral or immoral. Also I think it's important to realize the actual mechanic is choice, not morality. Morality can extend naturally from adding choice as a mechanic, but the actual mechanic is adding interesting choices with interesting consequences.

I think the important thing for any morality system is that you have choices that have direct consequences related to the world, not related to your character...

The mechanic is interesting because its development will be very different depending on how your game is structured. If you're creating a closed narrative with branches leading to alternate endings, the entire mechanic can be implemented in dialogue with the player's choices determining which sequence follows and which ending they get. All of their choices have to be decided beforehand and all of the NPC responses have to be scripted and acted.

By contrast, if you're implementing it in an open, sandbox-style game it can all be handled by the AI. The AI has to be smart enough to respond appropriately to the player's actions but the game doesn't have to know beforehand what the player will decide to do. The end result might appear to be similar, but the implementations are as different as night and day.